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Dear Decaturish – A small business owner’s case for the Credit Card Competition Act

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Dear Decaturish – A small business owner’s case for the Credit Card Competition Act

Steffini Bethea, Owner of the Purple Corkscrew Wine Shop & Tasting Room

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Dear Decaturish,

Nearly 2,000 merchants and retailers, including hundreds of small businesses like mine, sent a letter to Congress supporting the passage of the Credit Card Competition Act (CCCA), a bill that would help reduce the ever-growing financial burden of credit card swipe fees. The Georgia Alcohol Dealers Association, the Georgia Oilmen’s Association, and the Georgia Retail Association, representing hundreds of business owners from around the state, support this important effort. 

I own the Purple Corkscrew Wine Shop & Tasting Room in Avondale. It’s a cozy, eclectic wine room for novices and connoisseurs. We sell a hand-picked selection of small vineyard, boutique wines. Since I started selling wine in 2013, I’ve been charged a swipe fee every time a customer pays with a credit card. These fees average anywhere from 1.5-3.5 percent of the total transaction cost and they add up quickly. No business is exempt. Swipe fees are the second-highest operating expense for many small businesses. In 2023, Georgia businesses paid an estimated $2.7 billion in swipe fees.

Some months, I pay over $500 in credit card swipe fees. I would love to put this money toward lowering prices, marketing or additional inventory. But unfortunately, the burden of swipe fees is, for now, inescapable. Two powerful companies, Visa and Mastercard, control over 80 percent of the market and dictate a swipe fee rate schedule that major banks willingly adopt because they receive a portion of the increased fees. 

This cycle has allowed Wall Street to amass record profits at the expense of mom-and-pop shops simply trying to keep their doors open. The need for relief from swipe fees is critical. Since credit cards account for over half of card payments, there is no escape from the fees that eat away at already slim profit margins and often force merchants to raise prices across the board to cover costs.

Price increases impact all customers, whether they pay with a credit card or not. This means under- and unbanked individuals bear the brunt of credit card swipe fees, considering they cannot benefit from using a credit card, let alone enjoy the luxury rewards earned from more premium cards. As a result, it’s estimated that low-income Americans transfer a massive $3.5 billion in credit card rewards annually to those making over $75,000 a year, and Black Americans disproportionately make up more than $1 billion of that transfer.

This underscores the importance of Congress passing the CCCA, a bill aimed at providing relief to businesses facing financial challenges due to continually rising swipe fees. Passing the CCCA would grant merchants like me the option to choose between at least two different routing networks when processing transactions, breaking the longstanding duopoly of Visa and Mastercard. This move towards increased competition will foster much-needed innovation and motivate companies to maintain reasonable rates.

It’s not surprising Wall Street executives are spending loads of cash to prevent the CCCA from passing. A recent report shows several of the largest credit card issuing companies and banks spent $51 million lobbying against it. I hope Sens. Jon Ossoff and Raphael Warnock will push back against the moneyed interests of Wall Street and support Main Street America and small businesses like mine by passing the CCCA.

— Steffini Bethea

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